Busy Day Tomorrow

[cowpip 10]

Brilliant post, Milliard. Thanks.

 

Many (if not most?) of us using retail brokers reading this thread will not have access to the tools that you pro's have access to. I believe they would provide a strategic advantage toward entering trades and having perhaps a higher strike rate. But...

 

I would like to emphasize that although the more tools you have in your bag, the better, having such professional tools is not a prerequisite to success in forex. You can still quite capably bring in excellent cash flow if you abide by some simple rules (most of which have been repeated often in this thread):

1. Find an "edge" that works consistently for you.
   
2. Spend as much time at the screen watching as possible.
   
3. Be PATIENT in waiting for the GRADE-A setups.
   
4. Be DISCIPLINED in executing your edge without hesitation.
   
5. GO WITH THE FLOW.
   
6. Choose your battlefield (currency pair) carefully. Skew the odds of success in your favor as much as possible.
   
7. Use WISE MONEY MANAGEMENT. Protect your entries against losses. Don't ever let a winning trade become a losing trade.

These are repeats of what we all probably know. And most of it I was taught myself by those now present in this thread. But it doesn't hurt to repeat it over and over (and over).

 

Yes - having an underlying (higher-grade) view of the news and order flows would certainly be nice and could be used to sharpen your edge, but they aren't a prerequisite for success. (I know that Milliard wasn't implying that they were a prerequisite, but I can see some reading this thread who might feel like they need it to be successful.) A heap-load of money can be made using retail brokers by following these simple rules, even if you don't have access to anything more than a news calendar.

 

I have read of some people complaining that their retail broker has been playing tricks of various sorts on them, requiring them to switch brokers (supposedly because they make too much). The only people I can honestly think of who would be affected by this are those playing the news or the very fast time-frames (or those with very bad brokers). I've been with OAnda for years and can honestly say that if your edge isn't news-based or based on the very short time-frames (like the 1-min or smaller frames), there is very little that a broker can do to prevent you from making money, aside from turning off your feed. If your edge is flexible enough to be utilized on the larger and mid-term chart-frames (even down to the 5-min frame if you're very careful and picky), the "good" brokers won't be able to knock you out of positions very easily at all. So despite what some have said, I believe you CAN make excellent money from good retail brokers (I continue to do fine) if you abide by the rules.

 

Learning Forex is easy. Trading forex profitably is easy (once you find your edge). The hard part is learning to control your mind so that it doesn't prevent you from being profitable.

[milliard 10]

 

having an underlying (higher-grade) view of the news and order flows would certainly be nice and could be used to sharpen your edge, but they aren't a prerequisite for success. (I know that Milliard wasn't implying that they were a prerequisite, but I can see some reading this thread who might feel like they need it to be successful.)

 

I have read of some people complaining that their retail broker has been playing tricks of various sorts on them....The only people I can honestly think of who would be affected by this are those playing the news or the very fast time-frames

 

If your edge is flexible enough to be utilized on the larger and mid-term chart-frames (even down to the 5-min frame if you're very careful and picky), the "good" brokers won't be able to knock you out of positions very easily at all.

 

You cover some very valid points, especially those highlighted above.

 

There are so many things that can go terribly wrong attempting to chase these instruments around micro timeframes unless you know exactly what you're doing.

 

Most of the common & repetative mistakes can be very easily eradicated by simply viewing, planning & executing via the slightly larger timeframe references.

 

I'm not suggesting folks can't earn a wage trading exclusively technical templates off sub hourly sheets, but the odds are incredibly low if a very keen awareness of the bigger picture isn't taken into context at all times.

 

Smart post Cowpip.

[cowpip 10]

Amen to that, Milliard.

 

It's suicidal not to pay very close attention to the larger time-frames. Sentiment and momentum don't switch on a dime. The daily, 4-hourly and hourly frames (in order of importance, imo) are the "truth-tellers." I really prefer the 4-hour time-frame. It seems to be the best in terms of determining market sentiment and providing relatively tight entries (of course, zooming in to the hourly and sub-hourly as needed to secure the best possible entry).

[Sledge 13]

Milliard-

I cannot do any more justice to follow-up the post that cowpip made. I think he covered it quite well. I also THANK YOU for an outstanding and carefully crafted response once again. My hat is off to you!

 

Cowpip-

A stellar follow-up post and a most beautifully articulated group of thoughts. I agree with you 1000% about the larger timeframes and am glad to know that this somehow natural progression I made (without really realizing it) to Daily, 4 hr and 1 hr charts is indeed the path to further success. It made a tremendous difference in "pip gain" when I cherry picked my set-ups utilizing these much larger timeframes. To have folks such as yourself and Milliard continually confirm the stance speaks volumes to anyone who may run across this thread. The hope is that a very green and eager trader will read, absorb and attempt.

 

No doubt the "paint drying" will initially be to slow for them, they will bang their head hard on the 1 minute wall, the hope is they come to their senses before their seed capital runs out, remember this advice posted and say "I remember this thread somewhere on a forum that spoke to larger timeframes.. where is my Google bookmark?"

 

Sledge

[Anna-Maria 10]

Hi Aaron,

 

He’s not around until Wednesday of this week. Anna’s back tomorrow.

 

Neither of them are positioned on the Cable at present. They’re long Sterling via EURGBP & GBPCHF.

 

Was asked today what the reasonings were for taking recent Pound longs v/s Euro & Swiss when the clear trend on both pairs is to the Pound bear side.

 

Simply, technical mirrors of a short-term shift in fundamental bias. Nothing more complicated than that really.

 

The near-term picture on these things can change & react aggressively from day to day. If you look at a daily & 4hr chart of both pairs you’ll see the obvious behaviour unfolding. No need to expand on that.

 

Taking advantage of near term counter adjustments is valid as long as the environment justifies the execution. Technical set ups & flows will confirm the fundamental shifts if you give it time, & as long as the risk can be managed appropriately, then the trade can be tick boxed.

 

There are very visible upside-downside markers on both crosses to assist management of these counter trade opportunities, & they in no way disrupt the core (pound) short stance on either pair.

 

Regardless of who holds the aces in the long term trend pack, you’re still going to witness the price relationships at key levels which will enable you to make informed decisions. The choice is yours whether or not you wish to play ball, & will be dependant upon your preferred style & trade aims.

 

I'll pick one (Pound/Swiss) to stick up here as an example. Nothing fancy, just marrying up the Fundamental chatter with the technical map as the bars print & mirror the behaviour.

[Sledge 13]

Thank you Anna-Marie.

I foresee the GBP/USD this evening on a similar path. We have been playing the ping pong between 1.9960 and 1.9680 for a week + now. Every day I work to see if we are close to one or the other- and gauge whether it has momentum to break the line or is it going to bounce like a vending machine rubber ball- then back the other direction we go.

 

Looks as if their was still plenty of activity- even with the Rate Decision tomorrow- a lot of times we see a slow down, other times, it acts as if it is of no concequence what so ever.

 

The "Double boxed area" on your chart- did you mark it to show that beautiful row of test bars? That is a pretty sight. Testing and a lot of buying on the lows going on- and what a beautiful space ship launch off the pad as a result!

 

Aaron

[Anna-Maria 10]

The "Double boxed area" on your chart- did you mark it to show that beautiful row of test bars? That is a pretty sight.

 

Hello Aaron,

 

Yes I did

 

9600-650 established itself as the solid floor there from early March. Not really too difficult to assume that once they blanketed the growing (albeit short-term) shift in fundamental bias, prices would rise as soon as the last sellers conducted their business & the mid-term liquidation was put to bed.

 

Drilling down even further into the 60m would have gotten you well placed to avail yourself of those 2 daily purchasing bars on the 15th & 16th.

 

Important to make clear though that the trades on both are counter-trend. They're not core positions, therefore require slightly different management. They're both now buffeting off the expected reaction levels, on the back of recent dismal UK data.

[Sledge 13]

Anna-Maria-

Through my course of study I have heard little whispers here and there about how some folks who trade GBP/USD for example are wise to watch GBP/JPY or another GBP currency cross. Andre also made a nice statement about looking at GBP/CHF or another GBP cross to verify if this activity on GBP/USD is a fluke or if the moves are, well in a sense, REAL.

 

Would you possibly elaborate on the use of watching other currency crosses that a trader may not personally trade that pair, but may be a good insight to see whether the moves are indeed true or a "fit being thrown" by one of the children? I can't imagine anyone actually looking at say GBP/JPY and saying "Alright- GBP/JPY just tanked last night- I'll go short on GBP/USD" but some places I have found on this wonderful WWW have stated that very dangerous stance. How much weight do these crosses carry on the other pairings? Also is it safe to say that one "cross" is the main focus while the other pairings are more fringe crosses (i.e. is say the GBP/USD the big brother and the GBP/JPY or GBP/CHF the little brother and sister to the GBP/USD?)

 

Thanks!

Aaron

[Anna-Maria 10]

Could you possibly elaborate on the use of watching other currency crosses that a trader may not personally trade that pair, but may be a good insight to see whether the moves are indeed true or a "fit being thrown" by one of the children?

 

How much weight do these crosses carry on the other pairings?

 

I can elaborate sure, but I wouldn’t say that the views we hold are by any means right, wrong or indifferent – they’re simply our view & the way in which we approach & work the market.

 

We’re definitely not purely technical traders Aaron. We don’t fire up a chart station the minute we sit down first thing in the morning, in fact that’s probably the last thing we do, & one or two of the ‘older crew’ here don’t even bother to do that 4 days out of five.

 

A great deal of our prep & groundwork revolves around personal contact, fundamental diet & order book flows. I’m interested in which pair has a build up (dominant bid or offer) bias at a particular level or zone & who is stepping up to take a level on.

 

That’s where the “looking at other crosses” deal comes in. I want to establish wherever possible, whether Sterling is flavor of the day/week or if the buck is flexing it’s muscle across the board of late. How much weight does Euro have to throw around today & is the constant stream of data which ticks across the wires continuing to confirm one pairs dominance on the spread over the other.

 

By running the ruler across the British Pound, Euro, Yen, Dollar etc v/s it’s main trading partners, you can quickly determine if that currency is dominant/passive across the board or displaying a pattern of unique behaviour to a specific cross or pair.

 

It’s then a case of weeding out the chaff & focusing on the strongest v/s weakest pairing to see if an opportunity exists to avail yourself of a profit window.

 

You have to appreciate that each country will be experiencing it’s own particular economic strengths & weaknesses throughout the trading week, month, year. Different problems & challenges will affect the balance & flows of that country’s currency & it’s weighting on the world stage. And we all know how twitchy & nervous traders are when faced with uncertainty.

 

It’s by no means an exact science, nor does it follow a neat structure. Which is why, to stay ahead of the curve in this game you require a flexible attitude & an equally flexible approach.

[cowpip 10]

We can probably all tell by now that there is a fairly big difference in the tools that the pro's use to trade compared to retailers. They have access to tools that provide them with a unique view of the market (such as real-time order book flows). Most of us do not. But their view of the market is no different than the rest of us.

 

I'd like to be clear about one thing: Anna-Maria and the rest of the pro crew would be perfectly successful in their trading with or without access to those tools. We have to remember that they are dealing with entries that are SIGNIFICANTLY LARGER than the sizes retailers play with and that they likely NEED those extra tools in order to justify placement of such large orders. When you're dealing with many thousands of dollars PER PIP on a trade, you want to be absolutely certain that not only is the situation a GRADE-A setup according to your 'edge,' but that anything and everything else that is known about the market is skewed toward your entry. They are dealing with some SERIOUS cash. Their investors would balk if they weren't using anything but the highest quality information.

 

But their access to those tools does not in any way negate the effectiveness of their strategies they employ. I've seen some of them trade on their personal accounts with absolutely fantastically stunning results.

 

So don't let their use of these professional tools distort your thinking about what is and what is not possible.

 

They could undoubtably trade naked in the bathtub while simultaneously blow-drying their hair without getting shocked. Although I'm not certain I'd want to see proof of that!

Edited April 30, 2008 by cowpip

[Sledge 13]

Anna-

Thank you once again for your reply and question answering, I am most appreciative of your efforts, it means more than you know!

 

So don't let their use of these professional tools distort your thinking about what is and what is not possible.

 

Cowpip-

Basically, I know they get to have access to things that we as retail traders do not and I know that for them being so close to the action, they have a very heightened sense of the market and its quirks.

 

Since we in the thread have been graciously been given a gift to speak with these folks, scratch that, not only speak and ask questions of- but to have them answered and answered with such depth and description is a phenominal and trading life altering scenario.

 

I think that with this openess and continued dialogue, my personal goal is to hope to sharpen my trading skills and give me that "edge" that you spoke of in your post (Step #1) I personally do very well at my trading, but I am always open to honing my craft- to make it, more profitable, more fluid, and if possible and easier road to take.

 

I think all of the questions posed to the Anna, Art and Milliard have been learning in nature- we have yet to have someone post and say "Ok should I go short or long on XYZ" and expect these folks to just give out "hot trading tips" or abusing their kindness.

 

What they are doing for us is offering to help us, help ourselves- if we know the right questions to ask- They are teaching us how to fish so that we may eat for life, instead of giving us the fish so that we may eat for just one day!

 

Sledge

[cowpip 10]

I totally agree with you. My concern has been that people will say, "well it's no wonder I can't make forex work. Look at the tools they have." I believe almost anyone can make forex work quite well, if they have the patience and discipline to make it work.

 

I too have been enjoying their comments immensely, and I have appreciated your questions to them. They're very good questions and deserve being answered.

[milliard 10]

 

don't let their use of these professional tools distort your thinking about what is and what is not possible.

 

Absolutely right. If you think we or other professional operators out there get it right all the time, even with the access to some of the info we got, then you'd be very much mistaken. We take hits & get unseated like everyone else. Thing is, we get the hell out pretty quick when the glue comes unstuck & compound the shit out of a trade when it goes our way. But we strike out on our fair share of plays.

 

Common sense, patience & discipline will get you a good way down the road in this game.

 

If I had to offer 2 pieces of advice to new entrants in the FX field it would be:

 

Stay the hell away from mechanized/automated indicator based systems & don’t get sucked into trading economic releases. They’re both utter nonsense & a complete waste of time & money.

 

If you want to trade a purely technical based strategy, then pick a sensible timeframe, choose a couple simple set ups based around levels of obvious support-resistance, paying close attention to the supply-demand imbalance & test them out thoroughly before trading live dollars.

 

Don’t whatever you do EVER EVER chase a price (market) or average down. If you miss your trigger price, let it go & wait for another.

 

If your set ups are based around price action/supply-demand mechanics, then it will work across ALL available pairs & alternative instruments. If it doesn’t, then it’s too complicated.

 

When your view of a pairing is proven correct & you’ve engineered yourself into a core position then continue to feed into it. Don’t ever be afraid to back your judgement (winners).

 

Know yourself inside out & back to front.

Know your market inside out & back to front

Know your plan/strategies inside out & back to front

 

You’re competing out there every single day with operators who most definitely have those 3 key attributes nailed down tight as a drum.

 

If you haven’t also got them nailed down tight, then it’s only a matter of time before they take your money.

[cowpip 10]

Cable's price action (on the daily charts) is NUTS!!! It doesn't take much of a wind to blow it around these days.

[Sledge 13]

Cable's price action (on the daily charts) is NUTS!!! It doesn't take much of a wind to blow it around these days.

 

Yeah, Milliard asked me why do I even play with this "snotty camel" or something of that nature I'm getting a good bit of practice playing on both sides of the ping pong net with the GBP/USD though!

[BlowFish 10]

.....snip.... don’t get sucked into trading economic releases. They’re both utter nonsense & a complete waste of time & money.

 

 

A whole bunch of good information thanks.

 

You don't think a retail trader can make money bracketing news releases? Clearly not with a 'bookie' but with a proper broker with multiple interbank connections maybe feasible? Of course it becomes a bit more like an arcade game and you have to be able to deal with the fact the first spike is just as likely to be a shake out. Just wondered as there are strategies that work on index futures at FOMC time but they do require good execution.

 

Just curious.

[cowpip 10]

You don't think a retail trader can make money bracketing news releases? Clearly not with a 'bookie' but with a proper broker with multiple interbank connections maybe feasible? Of course it becomes a bit more like an arcade game and you have to be able to deal with the fact the first spike is just as likely to be a shake out. Just wondered as there are strategies that work on index futures at FOMC time but they do require good execution.

 

For me, trading the news is simply not worth the risk. There are MUCH better opportunities post-news - AFTER the true direction has been established. And then you aren't subjected to the tricks that brokers can (and do) initiate to shake out the gamblers.

 

My money is too valuable to gamble with. I'll take a post-news entry and ride the flow far sooner than a pre-news "wish upon a star" entry. Yes, I do know of strats that try to guess the direction of news based on reactions that occur just a few minutes prior to the news releases. But those strats are still (imo) nothing more than nearly-pure gambles. It would be a fairly simple matter for a broker to manufacture such reactions in such low-liquidity environments that immediately precede news announcements. You can't tell if the reaction is real or pretended. Thus, it's a gamble.

 

If you take the post-news price action (many minutes to hours after the news has come and gone), you are much more liable to see true price patterns that properly reflect market sentiment. THOSE are the times to enter.

 

Just my 2 bits...

[milliard 10]

Hi Blowfish,

 

As was stated early into that post, the comment was primarily directed at greenhorns. But to be honest it’s applicable all the way up the queue.

 

We don’t have direct experience regards indx ftrs, so can’t comment there unfortunately.

 

Of course folks will do what they think they need to do in order to turn a profit out there.

 

I’d seriously doubt most folks have the knowledge, capabilities & stomach for that type of elevated risk venture over a consistent basis, but that’s the beauty of the market…..the potential always exists to accommodate most styles & preferences – for a while anyway

 

Personally, there are far easier methods of extracting (long term) profit than chasing scraps on the back of a lottery roll, but each to their own!

 

We don’t play that tactic & we’re not aware of (colleagues) anyone who does.

 

I've (as a few of us have) worked with one or two hotshots who have adopted that style of operation. Needless to say their ass was generally removed from the seat faster than you could write their severence check.

[BlowFish 10]

Well it was mainly idle curiosity (they say curiosity killed the cat). Actually I don't even follow the currencies (yet) though I have now at least set up a couple of workspaces to be able to watch the FX futures. I only started following the FTSE a couple of months ago and have kind of been seduced by her.

 

As an aside, I hear anecdotally (so it may well be BS) that the currencies can be more 'technical' and trend better than index futures. I wonder if there is any truth in that? Of course the only way of really knowing for sure is to spend the screen time with the currencies but don't want to cheat on the FTSE just yet. Markets are odd while broadly the same they do seem to have different characteristic quirks.

[Sledge 13]

As far as the news, my own .02:

As a rookie trader I tried my hand at the news release game, I think everyone does, they see ALL THIS ACTIVITY, they see "WHOA if I was in on a Long, I would have made 40 pips in the blink of an eye" It is a very sexy way to dress the devil.

 

I utilize the news now only to be aware of the news and how that may affect a S&R level. Will it fuel it higher/lower or will it trap the unknowing and take their lunch money?

 

Trader Storytime:

Scene: On the Heels of a most powerful NFP data release

 

And Action: A trader sees a topping area and some consolidation prior to the release they see a nice uptrend in the background, they say "WOW this market is STRONG (he he) what a day to go long whoo hoo- I'm a gonna be rich today!"

 

5 minutes before the release you see that row of "Strong" green bars suddenly start to fade into down bars. The greenhorn trader says "They KNOW something- FORGET the Long- I'm going SHORT!" "Yup this is DEFINATELY a shorting day!- I'm gonna be RICH!" He opens his position Short.

 

The news hits- the market shoots northward. The once wouldbe long trader that went short instead is freaking! His stop is smashed in a matter of seconds, he beats his computer desk with FURY as he knew he should have taken that DAMN Long! After his short entry stop is smashed to bits- he says "Fine, I'll make it up" and places his order on a Long position. Then like a bad dream- the market stalls and begins to drop- it was a trap-OH NO. :doh:

 

The now Long trader is pissed and the "F-Bombs" are FLYING around the room along with various other objects! The trap locked him in long and the market is falling like a comet out of the sky! He gets stopped out again, licks his wounds but is scared now after an "0 for 2" in a 5 minute span that he just can't imagine going short- he thinks he should, no he KNOWS he should, but "should I" he asks himself? The market continues to fall, falling like a 2 ton boulder out of the mountains- "There is no stopping this train" he thinks and "This isn't some Kiddie Ride train and Disneyland- this is a Japaneese Bullet Train!"

 

So he waits and waits and waits- when he just can't STAND missing out on a position he KNEW he was right all along- BAM he gets in short, just as the bar closes- "thank god for that- I'm in!" relief comes over him as he thinks "No problem, this move will make it all back- the bullet train has just left the station, it has plenty of track to run on!"

 

Then here comes the covering or "dead cat bounce" and northward we go. "HERE WE GO AGAIN" cries the short trader- "I CAN'T FRIGGIN BELIEVE THIS" and now he is once again back in negative bankroll. He decides "Screw this, I'm getting out- this is some fixed game" and manually closes before his stop gets taken out. Now "0 for 3" he's a mess. He can't for the life of him figure out what went wrong. He takes no position and just watches. He's toast for the day!

 

That dead cat bounce bar closes and downward again we fall. The Short Trader says "F-This" and goes to the mall to find a job at Best Buy!

 

End Scene

 

And Folks: THAT is the News for today- Now Sports!

[milliard 10]

 

As an aside, I hear anecdotally (so it may well be BS) that the currencies can be more 'technical' and trend better than index futures. I wonder if there is any truth in that?

 

They have their moments Blowfish.

 

They sure can shift through the gears when they have a mind to. A lot depends on the flavor of the fundamentals as to how heavy a particular pair or cross will get whacked through the handles.

 

Stop driven trade is a pretty tasty carrot as a pair vibrates around key swing levels. Liquidation traffic can be acute at times & makes for good bonus profits, especially if you’re participating from a slightly longer timeframe than intra-day.

 

Euro & Yen (2 big dog constituents of the Dollar Index) trade well from a technical perspective for sure. Liquidity will help your cause if you’re a pure technical player, so you might want to proceed with a little caution if you’re studying & planning ops around some of the cross instruments. They'll definitely travel light (volumes) on the CME.

 

Even via the cash there are times you'll need to show a little patience if you're attempting to work an order thru the pipes. Generally they attract less attention than the majors, & can be a tad fickle.

 

Again, we can’t assist on the comparison basis, but I’m sure one or two folks who partake in indx ftrs as well as currencies will either confirm or deny that slant.

[cowpip 10]

I have a question for the audience at large, and especially for those with a little more knowledge in the fundamentals.

 

Not very long ago, the market was fixated on asset backed commercial paper. As I recall, it was contracting and was causing a lot of worry. That topic then died out over time as the sub-prime mess spread into other newer areas of concern.

 

But a report out of Reuters today states that this last week, commercial paper shrunk for another week (that makes the 5th week running) and asset backed paper shrunk again as well (making it 4 weeks for that stat).

 

I'm curious if anyone here believes this old can of worms might come back to haunt the market? Milliard - are you guys paying any attention to these fundamentals?

 

There are rumors that the commercial paper may be shrinking due to concerns regarding auto and related loans - which is currently thought to be a possible "new shoe" to drop.

[milliard 10]

We tick most of the stuff which flickers across the page Cowpip, but the market isn’t biting on that info, therefore it’s back pocket material.

 

Dealers are more concerned that heavy stops below 5550 in EU got snapped on the back of cushioning-non deteriorating U.S data & nervous Eurozone growth prospects (hampering ECB forward rates bias).

 

Fed watchers are beginning to price in higher percentage probability that they’re done easing for now.

 

You got to mentally filter your (psychology) priorities each trading day & shuffle the pack weighted to prime reaction material. Just think bout what primarily drives these candidates & who is taking note of the main drivers.

 

Interest rates (yield)…Inflation (growth)….jobs/housing/mortgage/capital inflows-outflows/export-import generation…..

 

They’re the primary concerns of most of the Central Bank & Treasury heads. Everything else ranks secondary.

 

Watch Euro for reaction then haul up Swiss alongside it for a temperature check confirmer. You can run your rule along Yen, Cad, Sterling etc for back up (v/s the Dollar).

 

The ancilliary stuff will only come into view once the dominant (& regular price drivers) gear begins to blur on the frame.

[cowpip 10]

Thanks Milliard. I know it's back-pocket material, but wasn't sure if it might become front-pocket material in the future. But really, you're right. That doesn't matter right now. It's being largely ignored right now, so ignore it.

 

The dominant themes you pointed out are definitely the focus. It will be interesting to see if the euro can regain control above 5550. It may take a horrific NFP number to knock reality back into the heads of equity and dollar bulls. I'm not at all convinced this is anything but a medium-term dollar rally. There are so many fires smoldering in the forest, it won't take too much of a wind to fan the flames into another fire that burns away at the dollar.

 

But for now (at least for today), they're buying dollars, so we follow.

[Anna-Maria 10]

If you’re trading +hourlies Cary & you got yourself a core position then the intra-week money flow drivers can be better adjudged in a relatively calmer environment..

 

It can cause angst & more than a little panic if you’re attempting to digest & form a view of the chatter/data/priorities when trading from an intraday timeframe.

 

Once you manage to get your core base you can utilize the data & the ebb & flow of the market currents caused by the drivers, to feed into your position.

 

You’ll notice (if you haven’t already) that a pair will begin to acclimatize to it’s key levels as it meanders back & forth on the back of it’s main fundamental influences. When events quieten down & the data cupboard/fundy flows are light, it’ll revert to technical trade.

 

These are often where your previous levels of supply-demand & the stop activity buffeting them, come into play.

 

The GBPCHF was offered up as an example this week, same scenario played out on the other pair mentioned earlier in the week, EURGBP. The re-visit to .7935-.7950 yesterday epitomized this behaviour too.

 

Price shifted down (long Sterling) on continuing disappointing Eurozone chatter. Sterling was balancing out & traders had priced in the fwd rate calibration & were focusing on dire Eurozone output.

 

Chatter quietened down & neutralized Monday & Tuesday whilst EU demand (stop) activity bounced it back up the ladder where it found overhead supply at the exact spot which kicked it down last Friday.

 

Thing is, nothing changed this week regards the key fundamentals which weighed on EU v/s Sterling. Technical trade came to the fore, & once the realities re-surfaced & traders shook the sleep from their eyes, that level which housed a previous supply-demand imbalance, clicked into gear again.

 

If you’re short & feeding in from further up the ladder, the intraday vibrations don’t register very highly on the radar. You use the ebb & flow to prepare to add-in again as prices meet overhead supply. You’re buying yourself time to confirm that your view remains correct…………for now!

 

Pull up a 240 & you’ll see it’s clearly highlighting the lower highs & lows behaviour on this pair…just look at the bar prints on the way down compared to the activity on the way back up?

 

We got an initial zone of potential demand lurking back at .7750-780 & we got previous lower high markers on your 60m to offer a guage to 1st level Euro strength on any reverse in the fundamental flavours from here. Job sorted.

 

Thing is, you got time to assess & prepare for a 2 way eventuality. You got your upside-downside levels ticked & crossed. Your profit trail stops can be calmly calc’d & you can adjudge the potential reaction of any impending data still in the can ready to print.

 

You got time to watch all the psychology going to work on the price, & time to gather all the relevant chatter regards stops/option barriers/fix activity etc relevant to your orders if you so wish.

 

You can also take a piss without stressing whether a rogue print is going to smack you in the mouth & erase your angst ridden mornings profits :o